Mr Hammond, who is due to announce his first Autumn statement next month, said: "The fundamentals of the UK economy are strong.

Video:Job figures show economy is 'strong'

"The economy will need to adjust to a new relationship with the EU. I am confident that our strong links with the rest of the world will stand us in good stead as we deliver an economy that works for everyone."

The UK economy's surprise resilience in the third quarter will cast doubts over the Bank of England moving to cut interest rates again in November.

However, British households are likely to be feeling the pinch from higher inflation, which hit its highest level for nearly two years in September, at 1%, and is expected to rise further as the plunging pound ramps up costs.

Mike Spicer, director of economics at the British Chambers of Commerce (BCC) welcomed the growth in the economy, but warned of the drop in industrial output overall.

He said: "Although many manufacturers saw a bounce this summer, in part from the lower exchange rate, this was not enough to prevent a contraction in industrial output overall.

"Many have found themselves on the wrong side of currency movements - facing increased costs for imported components.

Video:World Trade Organisation softens its tone on Brexit

"Boosting business confidence must be a key task for government in the months ahead."

Rain Newton-Smith, chief economist at the CBI, said: "The UK was on firm foundations going into the referendum and it's vital that we now seek to preserve these economic strengths.

"The Government will need to set out an ambitious, pro-enterprise agenda in next month's Autumn statement which will get firms investing now and lift productivity in the future across all UK regions."

Roy Taylor, managing director of Malthouse Engineering, a steel-cutting factory in Birmingham, said the figures were "heartening".

He told Sky News: "The day after Brexit, 24 June, we saw an immediate reduction in our order take - and that has continued. There has been a little bit of improvement in the last few weeks, but nothing dramatic."

He added: "We need more stability, more growth in the economy ... because people still want British products."